Lessons for Mueller

Share this post...

Moscow - The three types of power which decide the fate of regimes are force, fraud and subversion; that’s to say, arms, money, media.

The Roman Empire was good at using small armies to take on much bigger ones; by adeptly concentrating their force they managed to rule much larger large territories than the legions could cover.

The Byzantine Empire excelled at using bribery of locals to stay loyal; the pre-requisite for that was the intelligence to identify who to pay, how much, and how often. The British Empire used subversion to divide and rule most of their colonial targets, but if the British were matched for firepower and intelligence, they failed and were defeated – by the American colonists, the Maoris, the Boers, the Germans, the Japanese.

The American Empire excels at subversion on the home front. But abroad it usually combines fraud with subversion. When these two fail to preserve or topple regimes, US-made wars have been a consistent failure. The Russians are better than Americans at force and fraud. Schemes of subversion like the US plots to promote Boris Yeltsin, Anatoly Chubais, Mikhail Khodorkovsky, and Alexei Navalny to rule the Kremlin, are not winners with Russians; they are judged successful only by foreigners who read the Washington Post and London Times.

The Kremlin official responsible for Russian media involvement in the US presidential election of 2016 was Dmitry Peskov (2nd image, left); he doubles as spokesman for President Vladimir Putin. For Peskov’s intention to employ social media he has not been indicted nor identified as a co-conspirator by Special Prosecutor Robert S. Mueller III ( right). For the evidence Mueller has revealed of incompetence in the Russian campaign, the waste of money expended, and the failure of the campaign’s objectives, there are calls in Moscow for Peskov to be sacked.

He has so far avoided responding. “We have not yet familiarized ourselves [with the Mueller indictment], ” he told Reuters.

The 37-page indictment, dated February 16 and signed personally by Mueller, can be read in full here.

Mueller’s indictment reveals how much evidence was gathered from the internet server companies and social media platforms, Facebook, YouTube-Google, Twitter and Instagram, together with their banks and the PayPal payment service. But this is circumstantial evidence; the corpus delicti is absent.

Missing from the charge sheet is identification of the victims of the crime alleged, the numbers of victims, and the money spent to subvert or defraud them, as Mueller charges. The indictment alleges that “significant numbers of Americans” were targeted, “significant funds spent”, and “thousands of US dollars [paid for advertising] every month”; but no evidence is presented of these numbers. No witness has come forward to testify to having suffered; no alleged perpetrator or conspirator to substantiate criminal intention. Also, these aren’t the crimes formally charged against the accused Russians.

In short, the Russians are accused of violating the US law on registering as foreign agents, as well as the crimes of stealing identity data from real Americans and fabricating false identities to open and operate US bank accounts, credit cards and the PayPal system. Although “interfer[ence] in US political and electoral processes” is alleged, it’s an orphan — no such crime is charged in the indictment.

Another orphan is the charge of obtaining visas “through false and fraudulent statements” and “false pretenses in order to collect intelligence for their interference operations”. Mueller alleges this offence was committed in 2014, when three of the thirteen Russians named in the indictment visited the US briefly. However, the “intelligence” they are alleged to have gathered at the time wasn’t used, according to the indictment, until two years later. What this “intelligence” by “false pretenses” might have been isn’t provided in the evidence because Muller and his grand jury don’t charge anyone with visa fraud.

Fourteen weeks before last Friday’s indictment, executives of Facebook, Twitter, YouTube and Google testified in open congressional hearings on the same set of allegations as Mueller presented to his grand jury behind closed doors.

From left to right: Facebook General Counsel Colin Stretch, Twitter Acting General Counsel

appearing on October 31, 2017, at the Senate Judiciary Committee's Crime and Terrorism Subcommittee.

The media company witnesses started by identifying very small numbers of accounts, advertising messages, reader clicks, and bots (automated relayed messages). Subsequently, these numbers have been multiplied in US media commentaries by estimates of audience reach, although reach is not a measure of actual exposure. Still, compared with the aggregate volumes of internet traffic associated with the presidential election but unconnected to Russian sources, the numbers for Russian-source material amounted to minuscule fractions of one percent. The media companies weren’t asked for, and volunteered no report of how much money they had received from their Russian content sources.

In his indictment Mueller provided less precision than the rules of evidence and the defendants’ rights require under the US Constitution; Mueller is not expecting to try the thirteen named defendants in a court of law. In one example of an “overt act” of the alleged Russian crime (Par. 71), Facebook is reported as publishing an advertisement on August 4, 2016, for a “Florida Goes Trump” rally. Facebook charged the Russians for audience reach of 53,000, according to Mueller. But only 8,300 clicked on the ad (14%). Although the allegation is that this audience was then “routed to the ORGANIZATION’s ‘Being Patriotic’ page”, Mueller withholds his count of how many – more likely, how few readers followed the route. The Russians were still paying to advertise the same rally on Instagram two weeks later, on August 16, but no evidence is presented by Mueller that it happened at all. No route, no rally, no American victims, no evidence of Russian intention to commit a crime of election interference.

Four bank accounts have been identified at six banks “in order to receive and send money into and out [sic] of the United States to support the ORGANIZATION’s operations in the United States and for self-enrichment”. These banks, as well as the US dollar-clearing banks in New York, have provided Mueller with details of the originating banks for the transactions. The indictment identifies fourteen Russian company names as holding these bank accounts. The Russian company names are mentioned in evidence, but not the originating banks. If they were Russian state banks under US and European Union sanctions since 2014 (Gazprombank, for example), Mueller’s indictment doesn’t say so; noone has intimated that the Russian money was anything but lawfully earned and then legally transferred from source.

Details of fake or stolen names, driver’s licences or social security numbers have been reported by Mueller to substantiate the count of conspiracy to commit wire fraud and bank fraud. But this was a fraud with a twist. No sum of money is identified in the evidence as having been taken from an unwitting victim; all of it, however much or little, was sent to the US bank accounts from the alleged Russian conspirators and their companies, and spent on social media placements. As for enrichment – again, no sum reported in the indictment – this appears to have been earned by the US media companies and the US banks. Lawfully, according to Mueller. The only losers were the Russians, but the accused haven’t been complaining of not getting their money’s worth.

The criminal counts set out in the indictment turn out to be crimes without victims – that’s to say, no American victim, according to the charge sheet.

Mueller’s indictment is precise about the names of the Russian companies established by the principal defendant Yevgeny Prigozhin, allegedly “for operations to interfere with elections and political processes”. Mueller also claims that the only link he could find to the Russian government was the official registration of the “ORGANIZATION [Internet Research Agency] as a Russian corporate entity” “in or around July 2013.” Although the allegation is that Prigozhin’s organization had an “annual budget [of] the equivalent of millions of US dollars”, there is no evidence, nor even an allegation that this money came from a Russian government source. Instead, other companies operated by Prigozhin are reported to have had “various Russian government contracts”. Prigozhin’s parent company called Concord is alleged to have funded “the ORGANIZATION as part of a larger CONCORD-funded interference operation it referred to as ‘Project Lakhta’.” This name is a valuable clue, but Mueller and his US intelligence sources failed to realize.

Intelligence agency practice the world over, including the US services and the Russian ones, generate operational codenames by computer randomization. Lakhta isn’t one of them. It is the well-known historical name of a district of St. Petersburg on the shore of the Gulf of Finland. Lakhta is the Finnish word for gulf; it corresponds to the Russian word zaliv. But Lakhta is much better known these days in St. Petersburg as the name for the Lakhta Center.

This is the 462-metre skyscraper (right) being constructed to serve as Gazprom’s headquarters, and as a recreational and commercial complex. It is planned to be the tallest building in the city, in Russia, and Europe-wide. Many, if not most St. Petersburgers didn’t want the building, so the prominence of the name starts with strong negative connotations.

Budget overruns, corrupt tendering, and construction contract kickbacks under criminal investigation by the city authorities add to the Lakhta name’s notoriety. The likelihood that a Russian government intelligence or security agency would give such a name to one of its operations is zero, Moscow sources believe.

That Prigozhin would have named his operation Lakta hints at a link to Gazprom which the company, already under several different US sanctions, will be embarrassed to contemplate. Mueller doesn’t make the link, and the US media have failed to cast the innuendo.

Left: Yevgeny Prigozhin (left) with Gazprom chief executive, Alexei

Miller. Right, Prigozhin with Rusal chief executive, Oleg Deripaska.

Since Mueller makes no allegation of Russian government funding or intelligence service involvement in Prigozhin’s Project Lakhta, the indictment appears to be US evidence in reverse. It contradicts allegations of Russian intelligence service interference in the presidential election. Those claims have come from US intelligence community reports, congressional testimony, and press leaks. For more details, read this.

Mueller noted in passing that Project Lakhta wasn’t targeted only in the US. The indictment alleges that by September 2016 it was working on a budget exceeding Rb73 million ($1.25 million) per month, with bonus payments to its Russian employees of Rb1 million (1.4%). The money was being spent, according to Mueller, on “multiple components, some involving domestic audiences within the Russian Federation, and others targeting foreign audiences in various countries, including the United States”.

This is another clue to Prigozhin’s real line of business, and the reason for the multiplicity of company names and functional departments through which he operated; and for an employment roll Mueller counted as “more than eighty” in Project Lakta alone. Russian sources believe Prigozhin’s organization has contracted for domestic Russian operations paid for by Russian corporations and local politicians. Some of the operations are believed to be conventional positive advertising of events, products, campaigns, and ideas. Some reportedly involve the circulation of kompromat against business and election rivals; some to defend against botnet and denial of service attacks on corporate websites and communication systems; some to attack the websites of business adversaries or investigative journalists, Russia-based or Russia-related.

Investigations by Russian media and government regulators have been reporting for some time allegations that Prigozhin has been diverting money from state procurement contracts for himself, and for clandestine purposes approved by state officials and state company executives. For a sample of the details, start in 2014 with the St. Petersburg website Fontanka’s investigation of Mikhail Bystrov and Mikhail Burchik, the second and third defendants in the Mueller indictment. Fontanka said it had uncovered evidence that paying clients of the Prigozhin, Bystrov and Burchik organization included a youth group of the Russian Orthodox Church, the St. Petersburg municipal authorities, and a Gazprom media promotion company. The payroll of the organization was reported in mid-2014 to be Rb180,000 per month (about $5,500).

For a more recent sample of the Russian allegations against Prigozhin, read and this.

In December 2016 Prigozhin was listed on the US Treasury’s sanctions list, the evidence for which appears to have been cribbed from Fontanka and other Russian press reports. Prigozhin was accused of,

“having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, senior officials of the Russian Federation. Prigozhin has extensive business dealings with the Russian Federation Ministry of Defense, and a company with significant ties to him holds a contract to build a military base near the Russian Federation border with Ukraine. Russia has been building additional military bases near the Ukrainian border and has used these bases as staging points for deploying soldiers into Ukraine.”

Mueller’s indictment fails to mention this Treasury charge or its Russian media sources. Mueller claims the reason for the multitude of Russian corporate names used by Prigozhin in Project Lakhta was to “obscure its conduct” and conceal the Russian source of funds from the US media and US regulators. For much longer, however, Russian investigators have been reporting that Prigozhin has created corporate chains of this type to conceal personal enrichment schemes from Russian regulators and commercial competitors.

Prigozhin has replied publicly to the US prosecutor’s charges, not to the Russian ones. “The Americans are very impressionable people; they see what they want to see,” he is quoted by a state news agency as saying last Friday. “I have a lot of respect for them. I am not upset at all that I ended up on this list. If they want to see the devil, let them see him.”

Russian sources believe Prigozhin’s Project Lakhta was ordered by someone in a position to exercise a call on Prigozhin’s cashflow. They exclude Russian officials on the Kremlin Security Council — Sergei Ivanov, Sergei Lavrov, Sergei Shoigu, Anton Vaino, Nikolai Patrushev, Sergei Naryshkin – and dismiss the possibility that Project Lakhta had either President Putin’s or Russian intelligence service support.

President Vladimir Putin chairs the January 26 meeting of the Security Council,

the last to have been recorded on the Kremlin website. Attending were Prime

Minister Dmitry Medvedev (3rd from left); Federation Council Speaker

Valentina Matviyenko (on Putin’s left); State Duma Speaker Vyacheslav

Volodin (2nd from left); Chief of Staff of the Presidential Executive Office

The suspicion of Russian sources is that the American campaign element in Project Lakhta was “so hare-brained there is only one official who could have considered Prigozhin’s project worth the money and the attempt – Dmitry Peskov”. Peskov is officially titled Deputy Chief of the Presidential Executive Office and Presidential Press Secretary. From the Kremlin he supervises the budgets for the state television broadcaster RT, the state news agency Sputnik, and special US-targeted propaganda programmes, such as the Valdai Discussion Club for academics and the Oliver Stone films.

The Christopher Steele dossier accused Peskov of arranging negative media against Hillary Clinton during 2016; for an analysis of the veracity of that claim, read this. For a painstaking analysis of how the Mueller indictment discredits the Steele dossier, read Alexander Mercouris’s account.

Russian experts charge that the Russian targeting of Americans through social media, as described by Mueller, was a colossal mistake because the US audience for social media was young and overwhelmingly committed to Clinton. Between their intention to vote and the vote they cast, the social media made next to no difference.

GEOGRAPHY OF THE INTENTION TO VOTE FOR HILLARY CLINTON AND DONALD TRUMP AMONG 18-24 YEAR OLDS

Charts from the CIRCLE-Tufts University survey of how young Americans actually voted – compiled from exit polling — show the proportion of young whites voting for Hillary Clinton remained unchanged (within the statistical margin of error) compared to their votes for Barack Obama in 2012 and for the Democratic candidate in 2004, John Kerry. The corresponding young white male vote for Donald Trump in 2016 turns out to have been less than the vote for Mitt Romney, the Republican candidate against Obama in 2012; Kerry and Romney were the losers. Read the CIRCLE report in full here. Turnout among young voters was also unchanged from 2012.

According to the CIRCLE report,

“President-elect Donald Trump, while ‘losing’ the youth vote overall by 55% to 37%, garnered support from segments of the youth electorate: Whites, evangelicals, and young people in rural areas. Not surprisingly, he also drew significant support from young people whose ideas and concerns tracked closely with the key themes of his campaign: the state of the country, an interest in stronger immigration controls, and a perceived untrustworthiness of his opponent, Hillary Clinton.”

The big difference in voting pattern among the young social media audience was gender-based, according to the CIRCLE polling. Young females went for Clinton; young males for Trump. “While Clinton won by large margins among demographic groups like unmarried young women and youth of color, she lacked key support from young Whites, young men, and young White moderates. Some of these groups previously backed President Obama by wide margins in 2008 and 2012.” There is no evidence in the Mueller indictment that Prigozhin’s organization understood this.

The trend in candidate preference between the Democrat and Republican was much too small among both young men and young women for the CIRCLE sociologists to identify social media as making an impact on the vote outcome between Clinton and Trump. The biggest shift in the young male vote was not towards Trump, but against Clinton in the direction of the alternative candidates.

This political sociology of the presidential election isn’t news. The CIRCLE report was first published on November 17, 2016, just nine days after the votes were cast. The findings of voter alienation from both presidential candidates are well-known. “Young people may also be showing their disagreement and discontent with both parties,” the CIRCLE report concluded. “The Republican Party has a small base among youth, who are increasingly liberal as a whole, and even young conservatives’ ideology does not necessarily align well with that of older Republicans. Given young people’s ideologically leftward shift, it may become even more difficult for Republicans to increase their youth base. In this election, the GOP faced an additional challenge: some young Republicans’ aversion to their own party’s nominee.”

Brookings, the Washington think-tank most supportive of Clinton, reached the conclusion that her defeat was caused by “blowback” among older voters. In other words, Clinton’s defeat, Trump’s victory came from voting by older Americans. They were not the ones targeted by the Russian social media campaign; they didn’t see the advertisements and tweets the Mueller indictment is now reporting as a criminal conspiracy to “defraud the United States by impairing, obstructing and defeating the lawful functions of the government.”

Official Russian reaction to the indictment has been to ridicule the election interference allegation but avoid addressing the foreign registration and false identity charges. “Thirteen people interfered in the US elections?!” responded the Foreign Ministry spokesman Maria Zakharova.

“13 against an intelligence services budget of billions? Against intelligence and counterintelligence, against the latest developments and technologies? Absurd? Yes.”

Her minister Sergei Lavrov claimed: “unless we see the facts, all the rest will be just twaddle, I am sorry for my not so diplomatic expression.”

The unofficial Russian reaction towards Prigozhin’s activities in the US is more quizzical, and under the American pressure, more private. It acknowledges that Prigozhin is a commercial operator, and for every outlay he has a paying client. Who that client was for Project Lakhta is the object of speculation so far unreported in the Russian press.

To Russian lawyers the facts presented in the Mueller indictment suggest the big crime in the affair may have been a Russian one. If Mueller’s small numbers are correct, then Prigozhin may have spent much less money, and to lesser effect and purpose than he had led his client to believe and pay for. If there’s a difference between what Prigozhin was paid and what the Mueller indictment suggests he spent, Prigozhin may have a case for fraud to answer to Russian prosecutors – and his client, the charge of abuse of authority.

“If the US prosecutor makes it a crime for a Russian to pretend to be an American,” commented a Moscow lawyer, “will the [Russian] General Prosecutor investigate Prigozhin for the crime of spending such money with the pretence of having brains?”